A profit in Detroit's auto industry, had it been an animal, would by now have been enrolled into the EPA's endangered species protection program. So its only natural that the Ford Motor Co's quarterly $100 million profit raises more than a few questions about the long term prospects for, and direction of, Detroit in general and Ford in particular.

Here's the rub - Is the profit a testament to Ford CEO Alan Mulally's management and turnaround skills, or is it a tectonic shift in Detroit's fortunes? If it is the former, then that's good news for share holders, but only for the short term. If it is the latter, then its time to uncork the champagne, because a resurgent Detroit would let loose a whirlwind of sweeping change and optimism across industrial America. One thing at a time, and I'll stick to the facts. You can draw your own conclusions.

First, let's consider the results of Ford's corporate restructuring. Details from the Detroit Free Press. In all, Ford reported net income of $100 million, or 5 cents per share, up from a net loss of $282 million, or 15 cents per share, a year earlier. Excluding $4.1 billion in sales by Jaguar and Land Rover, which are being sold to Indian automaker Tata Motors, Ford's first-quarter revenues slipped to $39.4 billion for the January-March period, down from $43 billion a year earlier. Excluding special items, Ford reported an after-tax operating profit from continuing operations of $525 million, or 20 cents a share, compared with a loss of $172 million, or 9 cents a share, a year ago.

CNNMoney has the Q1 figures and cost cuts for Ford's North American operations. Ford's North American automotive business posted a pre-tax loss of $45 million, a big improvement from a loss of $613 million in the first quarter last year. However, revenue in the region fell 7.6% to $17.1 billion, as sales of more-expensive, profit-rich trucks and SUVs tumble owing to the U.S. housing market downturn and soaring fuel prices. In the first quarter, the company reduced overall automotive operations costs by $1.7 billion, as costs in North America fell $1.2 billion. Ford said Thursday that it had trimmed 4,200 hourly jobs in the first quarter thanks to its recent company-wide buyout offer.

Bill Koenig, Bloomberg News, reports that in his current post, Mulally has eliminated 46,300 jobs in North America over the past two years as Ford has closed or scheduled to close nine plants to match its shrinking manufacturing footprint. Ford yesterday deepened its planned second-quarter production cuts. The company now intends to build 710,000 cars and trucks during the period, a drop from its previous plan of 730,000. In last year's second quarter, Ford produced 810,000.

My point for quoting all this is to point out that everything you see is simply a result of corporate restructuring meant to satisfy Wall Street, which is hardly a long term strategy or a new direction or a trend. It's just sound business and something they should have been doing anyway.

Let's move to the long term prospects. Question is, does Ford's recovery have anything at all to do with automobiles, which might help fuel a long term recovery and a shift in consumer sentiment and the direction and focus of the company? Are they tapping into something which will help them improve sales in 2009 and onwards? Like say, price cuts, improved production techniques and quality standards which will cut costs without reducing Ford's market footprint? Or being prepared to take advantage of a post recession boom with brand new models? Short answer - Yes. Long answer -Well...keep reading.

Mulally's work isn't all slash and burn. He's also shoring up for the future, by boosting liquidity with the sale of luxury European brands, like the aforementioned $4.1 billion sale of Jaguar and Land Rover to India's Tata motors. This has the added benefit of allowing Ford to focus on the core brand without having to worry about Wall Street. Also, the quality ratings of Ford vehicles have been climbing steadily, and are now at or very near those of Toyota Motor Corp., which effectively cut Ford's warranty costs by $1 billion last year. And there's rumors that Mulally still plans to spin-off both the Volvo and Mercury brands.

Secondly, Ford, and the other Detroit auto makers, are engaged in a massive revamp and global integration of their engineering centers and product development, with different regions focused solely on product development and purchase of specific parts, which will enable them to produce and supply the same standardized cars in every corner of the world. Jeff Bennett from the Wall Street Journal reports that under the plan, Ford's North America teams will be responsible for electrical and body engineering for vehicles world-wide, as well as select powertrains such as V-6 and V-8 engines, hybrids and automatic transmissions. European teams will be responsible for chassis engineering, and certain powertrains, including four-cylinder gasoline and diesel engines, and manual transmissions. Asia Pacific and Africa engineering and purchasing resources will be integrated into Ford's global core engineering and purchasing groups in Europe and the Americas. "This is a crucial part of the plan that we started more than a year ago," Ford Chief Executive Alan Mulally said in a statement. "We need product development and purchasing organizations that are aligned on a global scale. This is an important step in fostering a One Ford approach that leverages our global resources and expertise."

Ford's first big test of this global strategy comes later this year, when the Fiesta subcompact is introduced in Europe in the third quarter and in China and the rest of Asia in the last quarter. The car comes to North America in 2010. Also, the next car after that, the Focus, will similarly be a 'World Car', with the same model sold everywhere in the world. All this naturally leads to a hefty cut in design and production costs, increases purchasing leverage, and slashes the time it takes to launch a new model. Now, this, you can safely say, is a long term strategy and a means of cutting costs without reducing Ford's market footprint. And the soundness of this strategy is boosted by Mulally's efforts to improve liquidity by spinning off peripheral brands and focusing attention on launching quality Ford models.

The last, but also one of the most important pieces of the puzzle that is Ford's resurgence, is the shifting of the health care costs for retirees and their family members from Ford to the UAW. Without this albatross around their neck, Ford, and the others in Detroit, have the freedom to start regaining the North American market and fueling expansions in Europe and Asia. Combine this with a post recession boom in 2010, along with the changes implemented by Alan Mulally, and you have a perfect storm which a lean and mean Ford will be geared and ready to take advantage of.

All said and done, Alan Mulally, who received $2 million in base salary, a $4 million bonus and more than $11 million of stock and options for 2007, deserves to be well rewarded. As things stand, so will Ford's share holders. Update: Apparently, Kirk Kerkorian thinks so too, and he's putting his money where his mouth is. New York Times report says that Kerkorian's investment firm, the LA based Tracinda Corporation, is placing a big bet on the long-term fortunes of the Ford Motor Company, having acquired 100 million Ford shares for $691 million, with plans for a $8.50-a-share cash offer to buy an additional 20 million shares. Upon completing the offer, Mr. Kerkorian would own a 5.6 percent stake in Ford Motor Co.

Alan Mulally is president and chief executive officer of Ford Motor Company. He also is a member of the company’s Board of Directors. Prior to joining Ford in September 2006, Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes. (media.ford.com)